PAL opposes grant of more entitlements to UAE carriers

INVESTMENTS made by local carriers to open up new routes will be undermined if Middle East carriers get additional entitlements in upcoming air talks with the United Arab Emirates, a top executive of the country’s flag carrier said.

“Should the UAE airlines get the additional entitlements they seek during the coming Philippine-UAE air talks, this will undermine the investments PAL and other airlines have made for the country in opening new routes to serve Philippine tourism and overseas Filipino workers,” said PAL President Jaime Bautista.

He said at risk is the healthy state of competition in the Philippines’ global aviation network, after PAL launched vital new routes to London (reopened in 2013), New York (2015), Abu Dhabi (2013), Dubai (2013), Riyadh and Dammam (2014).

Other Philippine and European airlines have opened their own routes to Dubai, Kuwait, Riyadh, Doha and Istanbul, all of which are vulnerable to another onslaught by Emirates Airlines and Etihad Airways if the UAE government is able to secure increased frequencies between Manila and the UAE, the PAL official said.

The current valid bilateral air pact with the UAE already allows Emirates and Etihad a maximum of 28 weekly flights to Manila and unlimited flights to Clark, Cebu and other airports in the Philippines.

In 2014, Emirates cancelled its Dubai-Clark route in anticipation of receiving permanent additional entitlements to the congested Ninoy Aquino International Airport. Also, Emirates was penalized by the Civil Aeronautical Board in December 2014 for selling without prior authorization flights that exceeded their weekly maximum entitlement.

Emirates and other Middle East carriers have been lobbying for more flights into Manila to be able to carry passengers to destinations beyond the UAE.

When PAL and European carrier flights to the Middle East and Europe stopped in 1997, the monopoly of air service enjoyed by Middle East airlines led to higher air fares and constrained the growth of European tourists visiting the Philippines.

“We respectfully call on the Philippine panel to the air talks to promote fair competition and support our airlines who have invested much in re-opening service to the Middle East and Europe,” Bautista said.

The Middle East carriers that are being investigated by the US and European governments for receiving over $23 billion in government subsidies can use their unfair financial advantages to drive out the competition if they manage to secure new entitlements in the forthcoming bilateral air talks with the Philippines, the PAL official said.

Level playing field
PAL predicts a repeat of the Philippines’ bitter experience with abusive Mid-East airlines in the 1990s will wipe out the gains of the last two years when PAL re-established service to the Middle East, Europe and the US East Coast.

The airline said it is always ready to compete energetically on a level playing field, and has been successful in operating at high frequency levels on many hotly contested routes between the Philippines and the US, Japan, China, Hong Kong, Australia, Korea and others.

PAL also pioneered many new routes ahead of foreign competition, such as PAL’s routes to Toronto, Darwin, Brisbane, Shanghai, Cebu-Japan (Tokyo, Osaka, Nagoya), and the upcoming routes to Auckland (New Zealand) and Cairns (Australia).